AM Agrigen announces $1.2 billion Louisiana greenfield

In May 2014, Bobby Jindal’s office announced that AM Agrigen had selected a site in St Charles Parish for a $1.2 billion ammonia-urea greenfield. I’ve been slow to make this update but full details are now at the Killona, LA – AM Agrigen project page.

Here are two reasons (among many) for my delay.

First, the number of ammonia capacity expansion projects is now almost unbelievable.

AM Agrigen’s plant is the 30th new ammonia plant to have been in development in North America since early 2012.

In Louisiana alone, this site is tracking more than 4.3 million mtpy from 7 projects. Of that, 0.5 million mtpy have already come online, 2.2 million mtpy are under construction, and at least a further 1.6 million mtpy are in the planning stages.

I measure capacity growth as starting from “early 2012” in part because that was when I started counting ammonia plants but mostly because that was when the price of natural gas dropped below $2 per thousand cubic feet, setting off this vast industry expansion. Within six months, in October 2012, AM Agrigen had started its negotiations with Louisiana officials.

The second reason for the slow update is that I didn’t know what to say about AM Agrigen. Here is a company with no history, building a plant of unknown size, with a blank page for a website. It made no sense until I realized who was promoting the project – about which site members can read in my Research Note.

There is significant fertilizer industry heft behind AM Agrigen’s project – three generations of it, in fact – as well as political and financial heft, at least on their home soil. How this will translate to the project in Louisiana, especially given the management problems that have plagued its backer’s plants over the last few decades, remains to be seen.